World Bank updates GDP forecast for Europe, Asia

The World Bank has updated its forecast for emerging and developing economies (EMDE) in Europe and Central Asia (ECA) for 2020, to minus 4.4% from minus 4.7% in the previous report in June.

Regional output collapsed in the first half of this year due to the fallout from the COVID-19 pandemic, said the report released Wednesday. After first appearing in China last December, the virus infected millions of people and led to measures - such as travel bans and lockdowns - to stem the pandemic, deeply affecting economic activities, especially tourism, travel, and manufacturing.

After the peak period of the pandemic in March and April, several countries eased measures starting in May and June, and economic data began to turn positive again. The report stressed that GDP growth is expected to recover next year but there are uncertainties related to the pandemic, such as the availability and distribution of a vaccine. "The recovery could be weaker than expected if the pandemic worsens, necessitating prolonged restrictive measures and/or escalating geopolitical tensions," it added.

The report's GDP growth expectation for the EMDE ECA was minus 4.4% for 2020 and 3.3% for 2021. The World Bank expected the largest decline in Montenegro (minus 12.4%), Kosovo (minus 8.8%) and Albania (minus 8.4), while only Tajikistan's and Uzbekistan's economies are forecast to grow positively, by 1.6% and 0.6%, respectively. Turkey's economy is expected to shrink 3.8% in 2020 and grow by 4% in 2021, according to the report.

ECA countries include Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kazakhstan, Kosovo, Kyrgyzstan, Moldova, Montenegro, North Macedonia, Poland, Romania, Serbia, Tajikistan, Turkey, Turkmenistan, Ukraine, and Uzbekistan.

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